Duck Corporation forecasted on December 21, 2020 to sell a machine to a company in Italy....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Duck Corporation "forecasted" on December 21, 2020 to sell a machine to a company in Italy. The selling price was 500,000 euros, to be paid on March 21, 2021. To hodge against fluctuations in the exchange rato, Duck entered into a forward contract on Dec. 21, 2020 to sell 500,000 euron on March 21, 2021, the agroed date of machine delivery, for $1.227 per euro. The company ends its fiscal year on December 31. The following oxchange rates wore quoted: Forward Rate Date Spot Rato (Dolivery on 3/21/2020) 12/21/2020 1.228 1.227 12/31/2020 1.222 1.221 3/21/2021 1.225 Required: A. Prepare all joural entries relative to the above event on December 21, 2020. 8. Propare all journal entrion relativo to the above event on Docember 31, 2020. C. Prepare al journal entrien rolative to the above evert on March 21, 2021. Duck Corporation "forecasted" on December 21, 2020 to sell a machine to a company in Italy. The selling price was 500,000 euros, to be paid on March 21, 2021. To hodge against fluctuations in the exchange rato, Duck entered into a forward contract on Dec. 21, 2020 to sell 500,000 euron on March 21, 2021, the agroed date of machine delivery, for $1.227 per euro. The company ends its fiscal year on December 31. The following oxchange rates wore quoted: Forward Rate Date Spot Rato (Dolivery on 3/21/2020) 12/21/2020 1.228 1.227 12/31/2020 1.222 1.221 3/21/2021 1.225 Required: A. Prepare all joural entries relative to the above event on December 21, 2020. 8. Propare all journal entrion relativo to the above event on Docember 31, 2020. C. Prepare al journal entrien rolative to the above evert on March 21, 2021.
Expert Answer:
Answer rating: 100% (QA)
The forward contract value at starting Zero but after that changes in fair vaue recognize the value ... View the full answer
Related Book For
Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
Posted Date:
Students also viewed these accounting questions
-
A company has entered into a forward contract for the purchase of gold, in 2 years, for $1300/oz. Does this arrangement meet the definition of a derivative? Analyze all required parts of the...
-
On 1 January 21y9, ZL entered into a forward contract for the purchase of raw materials to be used in its business to guard against loss through price fluctuations. On thedate of maturity of the...
-
Assuming that MNC entered into a forward contract to sell 10 million South Korean won on December 1, 2011, as a fair value hedge of a foreign currency receivable, what is the net impact on its net...
-
Review each of the following independent sets of conditions. Required: Use AICPA sample size tables to identify the appropriate sample size for use in a statistical sampling application (ROO 5 risk...
-
Peek Corporation owns 70% of the common stock of Seacrest Company. The stock was purchased for $420,000 on January 1, 2007, when Seacrest Companys retained earnings were $100,000. Preclosing trial...
-
What language functions are most probably intended to be served by each of the following passages? War is the greatest plague that can afflict humanity; it destroys religion, it destroys states, it...
-
Water is to be used to absorb acetone from a dilute mixture with air in a tower packed with 3.5-in. metal Pall rings. Average conditions in the tower are: \[\text { Temperature }=25^{\circ}...
-
Transit Airlines provides regional jet service in the Mid-South. The following is information on liabilities of Transit at December 31, 2011. Transit's fiscal year ends on December 31. Its annual...
-
3. A Channel section is connected to a 10mm gusset plate with 20mm- diameter bolts as shown in the figure. The connecting member is subjected to dead load and live load only. The pitch distance,...
-
Hi-T Company uses the weighted average method of process costing. Information for the companys first production process follows. All direct materials are added at the beginning of this process, and...
-
DynaCare Products' sales are all on account. History indicates that sales will be collected as follows: Month of sale 25% Month following the sale 65% Second month following the sale 8% Never...
-
Define elasticity. How is it measured?
-
Why are cross-sectional studies less likely to be afflicted with autocorrelation but highly subject to heteroscedasticity?
-
Rank the following from highest freezing point to lowest freezing point: pure water, 0.05 M NaCl, 0.05 M MgCl2, 0.05 M glucose (C6H12O6). Explain.
-
As a city planner for the National Health Service in London, England, your duties include reconciling differences with the provisions for healthcare elsewhere in the United Kingdom. Would you expect...
-
Assume that the six-month Treasury spot rate is 1.7% APR, and the one-year rate is 2% APR, both compounded semiannually. What is the price of a one-year $1000 par Treasury bond with 2% coupons?
-
Debbie Berger's salary is $60,000, and she is covered by her employer's noncontributory, nondiscriminatory group term life insurance policy in the amount of $90,000. Identify the correct statement...
-
Avatar Financials, Inc., located on Madison Avenue, New York City, is a company that provides financial advice to individuals and small- to mid-sized businesses. Its primary operations are in wealth...
-
There following excerpts are from the financial statement note on Derivative Instruments and Hedging Activities in Molson Coors Brewing Companys 2009 annual report: Simultaneous with the September...
-
Using the data in P12-6, prepare the journal entries required by Coleman Inc. on January 1, 2017, assuming that (a) Task does not guarantee the residual value and (b) Task does guarantee it. Coleman...
-
Dunn Company's 2017 income statement reported $90,000 income before provision for income taxes. To aid in the computation of the provision for federal income taxes, the following 2017 data are...
-
What did the temperance reformers see as the cause of wife abuse? How did they propose to solve the problem?
-
What kinds of qualifications might a statute place on someone who is in a dating relationship? What problems might these qualifications pose?
-
In brief, what is a civil order of protection?
Study smarter with the SolutionInn App